The typical retiree lives 20 years after retirement. For those who do, that initial investment of £800.80 could generate around £7,653 in total additional state pension.
Again, this assumes that the state pension increases by 2.5% per year on average over this period.
Lowe said it wasn’t good for everyone. It all depends on how long you live after receiving your state pension. “Those who die a year or two after retirement could receive less than they invested, so think twice if they are in poor health. »
Buying extra years could backfire if you lose means-tested state benefits, in particular Pension Credit, which boosts a single pensioner’s income to £182.60 a week or 278 £.70 per week for couples.
If you are likely to accumulate 35 years of NI contributions when you retire, again, this option is not for you.
This is because you cannot buy MORE than the new maximum state pension.
You can usually only make voluntary NI payments for discrepancies for the previous six years, although the Department for Work and Pensions (DWP) has temporarily extended this period.
Visit Gov.uk to check your NI record, see if you are eligible to make voluntary contributions and how much it will cost. Or contact the Future Pension Center on 0800 731 0175.